Saturday, November 23, 2013

Apple survives on request for injunctive relief on utility patents

The Court of Appeals for the Federal Circuit gave an opinion in Apple v. Samsung on Nov. 18. From the text

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Apple Inc. appeals from an order of the U.S. District
Court for the Northern District of California denying
Apple’s request for a permanent injunction against Samsung Electronics Company, Ltd., Samsung Electronics
America, Inc., and Samsung Telecommunications America, LLC (collectively, “Samsung”). See Apple Inc. v. Samsung Elecs. Co., 909 F. Supp. 2d 1147 (N.D. Cal. 2012)
(“Injunction Order”). Apple sought to enjoin Samsung’s
infringement of several of Apple’s design and utility
patents, as well as Samsung’s dilution of Apple’s iPhone
trade dress. We affirm the denial of injunctive relief with
respect to Apple’s design patents and trade dress. However, we vacate the denial of injunctive relief with respect
to Apple’s utility patents and remand for further proceedings.

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Background

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Apple is seeking a permanent injunction against
Samsung’s infringement of six patents—three design
patents and three utility patents. (...)

The district court analyzed the four principles of equity enumerated in eBay and then, weighing the factors,
concluded that they did not support the issuance of an
injunction against Samsung’s infringement of Apple’s
patents. We find no reason to dislodge the district court’s
conclusion that Apple failed to demonstrate irreparable
harm from Samsung’s infringement of its design patents.
Accordingly, we affirm the denial of injunctive relief with
respect to those patents. However, with respect to Apple’s
utility patents, we conclude that the district court abused
its discretion in its analysis and consequently remand for
further proceedings.

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As to the design patents

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The district court found Apple’s evidence inadequate.
With respect to the evidence that design is important in
consumer choice, the court noted that “the design of the
phones includes elements of all three design patents, as
well as a whole host of unprotectable, unpatented features,” and that Apple had “ma[de] no attempt to prove
that any more specific element of the iPhone’s design, let
alone one covered by one of Apple’s design patents, actually drives consumer demand.” Id. The court concluded
that “even if design was clearly a driving factor,” and
“[e]ven if the Court accepted as true Apple’s contentions
that the patents cover the most central design features, it
would not establish that any specific patented design is
an important driver of consumer demand.” Id. In other
words, the court found this evidence too “general” to
establish a nexus. Id.

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As to the utility patents of Apple:

The district court did err, however, in its treatment of
Dr. Hauser’s survey evidence. Dr. Hauser’s survey purports to show that consumers would be willing to pay
fairly significant price premiums for the features claimed
in Apple’s utility patents. In rejecting Dr. Hauser’s
survey evidence, the district court stated that “evidence of
the price premium over the base price Samsung consumers are willing to pay for the patented features is not the
same as evidence that consumers will buy a Samsung
phone instead of an Apple phone because it contains the
feature.” Id. (emphasis added) (internal quotation marks
omitted). As we have already discussed above, however, a
showing of causal nexus does not require this level of
proof. Rather, there may be a variety of ways to show
that a feature drives demand, including with evidence
that a feature significantly increases the desirability of a
product incorporating that feature. Moreover, we see no
reason why, as a general matter of economics, evidence
that a patented feature significantly increases the price of
a product cannot be used to show that the feature drives
demand for the product. This is not to suggest that
consumers’ willingness to pay a nominal amount for an
infringing feature will establish a causal nexus. For
example, consumers’ willingness to pay an additional $10
for an infringing cup holder in a $20,000 car does not
demonstrate that the cup holder drives demand for the
car. The question becomes one of degree, to be evaluated
by the district court. Here, the district court never
reached that inquiry because it viewed Dr. Hauser’s
survey evidence as irrelevant. That was an abuse of
discretion.

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I'm a patent lawyer located in central New Jersey. I have a J.D. from the University of Chicago and a Ph.D. from Stanford University, where I studied graphite intercalation compounds at the Center for Materials Research. I worked at Exxon Corporate Research in areas ranging from engine deposits through coal and petroleum to fullerenes. An article that I wrote in The Trademark Reporter, 1994, 84, 379-407 on color trademarks was cited by Supreme Court in Qualitex v. Jacobson, 514 US 159 (1995) and the methodology was adopted
in the Capri case in N.D. Ill. An article that I wrote on DNA profiling was cited by the Colorado Supreme Court (Shreck case) and a Florida appellate court (Brim case). I was interviewed by NHK-TV about the Jan-Hendrik Schon affair. I am developing ipABC, an entity that combines rigorous IP analytics with study of business models, to optimize utilization of intellectual property. I can be reached at C8AsF5 at yahoo.com.